Marisawright

I would agree that this is something that needs research, I am being made redundant in the near future so option of gaining PR after 4 years on a 457 now a none runner. I am over 55 and was under the impression that I could access 1st 180k tax free (I must have read that in the financial pages) however after consulting my fund today they advise that is for residents & none residents are taxed at 35%. That's on to of 15% taken off contributions !!

Yes, non-residents are taxed very differently, which is why I've been advising the OP to get his super out of the fund while he's still a resident.

x2 Adults

 

Shipping = 2200 GBP

Flights = 1100 GBP

Cheap car = 7000 AUD

 

That was it.

 

Stayed with friends till there were two pay cheques coming in (5 weeks). Then moved into a rental. Bought missing furniture, then got a better car.

..... in my book, the cost of that missing furniture and the cost to update to a better car should also be included in your costs. Also the cost of car insurance, home insurance, mobile phone contracts, broadband, phone, all are costs you need money for early on. Plus I'm sure you ate a bit of food and gave your friends some money for putting you up?

I did it. It's a pain. Unless you have a good friend managing it for you. Basically the estate agent lied to me about the condition, and charged a fortune for repairs. Plus I had these awful tenants who never paid the rent on time, and always had a repair job to complain about to justify paying late. Nightmare. Did it the other way too. I'd never do it again unless I had a trusted friend to manage it, or I really loved it.

I've had four investment properties in total, over a period of twenty years so a lot of different tenants. Never, ever had a problem. You were unlucky. And I used agents not friends.

Lets hope they do then! The poster did not say he was retiring just that he was leaving the country the only relevant part of tax/super I knew about that is for non-permanent residents along with Aus citizens.

PS, do you think they may chase after you for the tax element though?

In order to leave the country he will have to give up his job! So it will be his last job in Australia, and that's all that matters.

What tax element are you referring to? If you mean the usual tax that's payable if a 57-year-old withdraws a lump sum, then I'm not sure what happens - I suspect the super fund may deduct it.

Anyhow, that's why it's so important to get it all sorted before he leaves the country, so there's no question of whether he's resident or non-resident etc.

As long as you have an Aussie passport you have to pay tax on worldwide income even if you don't own property or don't even live there.

 

You are an Australian citizen once you have that passport, so you have to pay your taxes in Australia for the rest of your life

 

There's no way out of it, not being resident or not owning property doesn't exempt you anymore.

Total rubbish. Where you pay tax is determined by whether you are legally resident in a country - it has NOTHING to do with citizenship.

It's my husband who's going Marisa.....what made you think I was 'older' haha? I am 'older' than my toyboy hubby you're right...but only by two years.

Hubby has been granted his WHV before he's too old for one....which will be in about a week or two !

Didn't mean you were "old", just that you were a "serious" migrant rather than a backpacker.

He's going to Darwin.... So I expect it'll be pretty sweaty and humid when he arrives and then ease off slightly as time goes on into the dry season.

 

You had me really confused there, jodipodi, for a minute there I thought YOU were the one going on a WHV, and I was so sure you were older than that and going for PR - very confusing!

For people in my situation who like to work for an international company, I could, if the opportunity arose, ask to be sent off overseas on an expat assignment to a Middle East or Asia office for a few years and I can enjoy full expat tax-free status being a UK citizen.

 

 

My oh has also worked on similar contracts and you are right, his salary was tax-free. But that is a special arrangement while you are living in the country. If you had bought investments and then left the country, you would've become liable for tax as a non-resident. Different countries take different attitudes to non-residents: some give them more favourable treatment than nationals, some give them less favourable treatment. Australia is less favourable.

If you've taken out Aussie citizenship there are tax obligations that go with it.

There are tax implications whether or not you're a citizen. If you're a foreign national owning investments of any kind in Australia, you have to pay tax on it.

Not quite sure of your logic Marisa? We are all complaining about the frozen pension, it's a totally illogical rule

I agree it's illogical and you're entitled to complain, but I was replying to JohnDoe who said it didn't matter - because it's topped up by the Aussie pension. I was just pointing out that only works if you're entitled to the Aussie pension!

The advice I have been given by my Superannuation fund is that if I retire from the workforce in Australia and I am over 60 then I can take the whole amount with no tax deduction. I can go where I like after that and work in another country if I choose, so long as I don't work in Australia again.

Exactly. In fact, I've been told that even if you retire and take your lump sum, you are still entitled to change your mind and go back to work in Australia in the future. They won't come chasing after you to get the money back. They recognise that people's circumstances change.

I would agree with what others have said regarding financial advice on this especially with the amount involved, but a couple of things come to my mind and the first is why have two funds? you are paying two account fees. Secondly turning 60 does not I believe give you access to lump sums, it gives you the opportunity to open a 'transition to retirement' pension fund but lump sum payments are not allowed until you reach retirement age.

The rules are further complicated (and potentially costly) for when you are a non resident, and that applies to both lump sums and pension payments from super in how they are treated for tax purposes in both Aus & UK.

If you read my posts, that's exactly what I have been pointing out - that's why I'm saying that if he wants to take the lump sum, it's absolutely critical to withdraw the money and get it into an Australian bank BEFORE he leaves Australian shores.

I am not aware of any obstacle to withdrawing a lump sum from your superannuation at 60. Preservation age is 55.

Then there's a another whinging about "frozen UK pension" so what? Any shortfall below the Oz state pension level and Centrelink tops it up to the Australian pension level.

Well yes, IF they qualify for the Australian pension. I think the people complaining about the frozen pension didn't manage to complete the required years of work before reaching retirement age.

Yes, it just would be great if as we have worked so far for 5 years and not been a burden on the Government that another protocol was in place to transfer into PR. Still plenty of work left in us to contribute to the Country,

Yes I'm sure you will, but we all get old and you are no exception, I'm afraid. Thanks to modern medicine we all live a lot longer, but we don't live longer healthy - and most of us die of some kind of illness which may require prolonged care in our last days, months or even years.

Even if you work till you're 70, the equation doesn't add up - what if you live till you're 90, there's no way your 20 years of taxes will pay for 20 years of medical treatment, aged care, pensioner subsidies etc. That leaves me, the Australian taxpayer, to pick up the bill.

I do feel sorry for people who find themselves in this situation but on the other hand, I can see why the Australian government feels it's necessary.

The big snag is that if you keep the house, you'll have to submit an Australian tax return every year and you'll be subject to Australian tax on the rental.

That may not sound too bad - if it's a fairly new home, you would claim depreciation and could even make a profit BUT for the fact that as a non-resident, you'll get no tax-free threshold.

That means every penny of the rent will be taxed at 30%. Then when you do ultimately sell it, you'll pay double the Capital Gains Tax that a resident would.

I had a investment property in Darwin before I left, which paid me a nice income every year. The tax implications of keeping it were so bad that I sold it before we left. Wish I hadn't now as we will be going back!

Be careful. Paying tax on your lump sum in Australia may not mean that you won't have to pay more tax in the UK. Residency for tax purposes is the key to it, so find out the facts first.

He's talking about taking the lump sums BEFORE he leaves Australia. Once the money is in the Australian bank it's just money.

Thank you .... Thats good to know... I might just take them both out and pay the Aussie tax on them.... I topped up my UK pension to the 30 years years back so I expect a full pension there....although I think they might have extended it to 35 years . I came to Aussie in 97 so you say I can ask for that time too 2001 to be taken into account ? If not I might top it up..

thanks again for your advice..

We came to the conclusion that taking the lump sums before leaving was the least painful option - however we didn't do it, because we weren't 100% sure that our move to the UK would be permanent. As it turns out, I'm glad we didn't as I haven't settled here well at all - guess I've just become more of an Aussie than I realise after 30 years!

I'm not in Adelaide but hopefully some of our Adelaide members will be along soon.

I have a soft spot for Adelaide, it's a lovely compact city. I used to live out in country Victoria and if I drove to Melbourne, it would take me four hours to get to the edge of Melbourne and another whole hour to get to the centre - whereas it took me four hours to get to the edge of Adelaide and 20 minutes to get to the centre! Yet it's still big enough to have all the amenities you need. Beaches and wineries within easy reach. It's a restaurant and cafe culture rather than a pub culture.

However employment opportunities are definitely more challenging. Most of the big companies have their major installations in Melbourne or Sydney. Adelaide is also well known for being a "who you know, not what you know" culture.

I suggest getting on seek.com.au which is Australia's biggest job search site. Notice which agencies are advertising work in your field, ring them up and ask them for their opinion. Don't email - you'll get much better information in a phone call.

Neither of the funds are self managed... I am sure I can't wait until I am 60 to go back but I was going to try to leave the funds in place in oz for as long as I could.

OK, if you can't wait till you're 60 then you have two choices - either take the lump sums now and resign yourself to paying the Australian tax on that (no British tax payable), OR leave the money in the funds, and convert them to pensions when you are ready. Or maybe you could cash in one, and convert the other.

The main thing to understand is that withdrawing the lump sums after you've left Australia isn't an option unless you want to lose a huge chunk of the money in tax, so it's vital to decide what's best BEFORE you leave the country.

One other thing - have you asked for a UK pension forecast? You won't get the Australian govt pension, but you will be entitled to a UK one. Once you're resident in the UK you can apply to have your Australian work record up to 2001 recognised, which will increase the pension you can get. You need 30 years' work record to get the full UK pension - if you're still short after claiming your Aussie record, you can pay extra NI contributions to make up the difference. The pension forecast will tell you how much and how to do it.

https://www.gov.uk/future-pension-centre

We get a mention!

http://www.telegraph.co.uk/expat/expatlife/11723866/Is-the-sun-setting-on-the-Australian-dream.html

What do you mean by "seeing" this guy? Age isn't a problem, but you'll need to prove that you've been living together for at least 12 months.

Some people do get accepted when they haven't lived together, but there has to be a really good reason why circumstances have stopped you setting up home together.

Your relatives aren't closely related enough to sponsor you.

To get sponsored by an employer, your oh would still need an occupation that's on the CSOL. Besides, that sponsorship would be for a temp job only (457 visa).

A 457 visa is a great choice for someone wanting to experience Australia for a few years, but it's a risky choice for a family. For one thing, you are not entitled to benefits (e.g. child care subsidies, free schooling) in some states, and that can make it very expensive. Also, your oh would be dependent to that employer for four years: if the company restructured and his job disappeared, or the company went bust, the whole family would have 90 days to leave the country. Immigration won't care if your children are in the middle of exams or if you have a house to sell - you have to go.

Wow..... Thank so much for that info... Plenty of options there... I just have to determine the best way.... Thank you again..

Yes plenty of options there, but all of them will cost you a percentage of your super fund in tax - sometimes a very big percentage.

If I were you, I would stay in Australia until you're 60. Then you can withdraw the entire lump sum from both funds tax-free and have them paid into your Australian bank account. Then when you arrive in the UK, you can transfer the whole amount to your UK bank account using Moneycorp - tax-free, because it's just money.

You'll save so much money on tax, it will pay for one or two holidays to the UK every year till you're 60.

One last thing - if either of your funds is a self-managed super fund, then you'll have no choice - you'll have to close down the fund before you leave Australia, or you'll be taxed by the Australian government as a non-resident - which will cost you 40%.

From what I've read so far, if you are a UK resident for tax purposes and you receive a lump sum from your superannuation (pension) fund then the Inland Revenue regard it as an unauthorised payment which will be taxed at 55%. I am in the process of finding out myself exactly how it will affect myself and I would advise others, especially if you have $600,000 to consider, to find out for themselves. Get professional advice or contact the Inland Revenue yourself is my advice.

 

My plans are on hold until I know exactly where I stand as 55% is an eye watering amount to pay on top of the 15% tax paid putting it in.

It's one of the reasons we decided our sojourn in the UK had to be temporary not permanent - no matter what you do, there seems to be a tax hit and our super pot is small enough already. I've had conflicting advice about how much tax we'd pay on the lump sum but eventually we put it in the too-hard basket, frankly!

Does anyone know what the process is for transferring my oz super funds to the UK when I go back later this year ? I am 57 this year and eligible to access my super at 55... I have two funds with a value of approx 650 k.. Think of leaving one of the funds here and would try to leave it until I am 60... I believe that would save on tax implications in oz.... Really dont know which way to go ? Would anybody have an idea of what you must do with the fund assets once they are in the UK ?

All you have to do is tell the super fund that you want to withdraw your balance. Do this well in advance so they will pay it into your Australian bank before you leave.

Once the money is in your bank it's just money, there are no rules about what you can and can't do with it. Once you've got set up in the UK you can transfer it to a UK bank account using a service like Moneycorp (if you join through these forums they won't charge you fees,which will save you a packet).

If you were already over 60 that would be a no-brainer, no tax to pay and you can do what you like with the money. However because you're 57 you'll have to pay some tax no matter what you do, so you should get advice from an accountant to work out which option will be less painful.

As you know, if you withdraw your lump sum now, you'll pay some tax. If you wait till 60 to withdraw your lump sum, you could do that tax-free if you were living in Oz - BUT if you're a UK resident by that time, the UK government might take a HUGE chunk in tax, because it will be income. So you need someone who knows both systems to work out which way will cost you less in tax.

There is a third way to consider too - leave the funds in Australia, then convert them to pensions when you need them. You will have to declare those pensions to the UK tax office and they'll be taxed as normal income - but you get a tax-free threshold, same as Oz.